SPC Issues Judicial Interpretation (II) on the Application of Law in Trial of Labor Dispute Cases

The Supreme People's Court (SPC) has recently issued the Interpretation on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (II) (the "Interpretation"), which will take effect on September 1.

The Interpretation unifies the legal application standards for issues such as non-compete restrictions and commingled employment. With respect to disputes over the standard for the "consecutive conclusion of two fixed-term employment contracts," the Interpretation clarifies the circumstances under which a situation shall be recognized as "consecutive conclusion of two fixed-term employment contracts," thereby preventing employers from circumventing the obligation to enter into an open-ended employment contract. Regarding the validity of non-compete clauses, the Interpretation provides that, if the employee has not learned or accessed the employer's trade secrets or intellectual property-related confidential matters, any non-compete clause agreed upon between the employer and the employee shall be deemed invalid and not binding on the employee. Where the employee falls within the scope of personnel subject to non-compete restrictions, the non-compete terms, including the scope, geographic area, and duration, shall align with the trade secrets or intellectual property-related confidential matters learned or accessed by the employee, and any part of the terms exceeding reasonable limits shall be deemed invalid.



(Source: https://www.court.gov.cn/zixun/xiangqing/472691.html)

Note: The link to the Chinese official website of the document is for your reference.